BUSINESS Bitcoin Cash’s fate doomed unless it stands out from its cryptocurrency rivals
MOSCOW: The newly established Bitcoin Cash cryptocurrency will not outlive Bitcoin and rival digital currencies, amid the rapid growth of digital payment systems, unless it offers exclusive services to seperate it from the crowd, say experts in the field.
On Tuesday, the software code of Bitcoin, one of the most popular cryptocurrencies based on blockchain technology, split and generated a new digital currency called Bitcoin Cash.
Blockchain technology is a database, composed of so-called blocks, which constantly grows in a linear, chronological order. It is often used in the sphere of cryptocurrencies, but also could be applied for other purposes, such as for management oper- the last couple of months. The concern and the fear climaxed a few weeks ago when Bitcoin dropped to $1 800. After it hit $1 800 in the middle of July, news leaked out that we were going to get past the fork without any problems, so the price started to rally, jumped 50% and it hit $2 700 on Monday.”
According to Serge Schouterden, a co- founder of CryptoArticles, the hard fork and the eventual split of Bitcoin due to the rift between the currency’s creators “was to be expected”.
“Bitcoin Cash is the same as Bitcoin itself, only under another name. It is like all the thousand other cryptocurrencies out there in the past and today, a lot of promises but most of them, if not all fail to deliver. Some even are exposed as scams by criminal elements,” Schouterden said.
Years of disagreements between Bitcoin’s developers over its future resulted in the new digital currency that shares the same blockchain technology, but increased the block size from 1MB to 8MB.
Last month, Russian president Vladimir Putin said he was “cautious” about the use of Bitcoin and other cryptocurrencies because “almost nothing is regulated in this area at the moment”.
On Wednesday, Russian economic development minister Maksim Oreshkin said the growing use of different cryptocurrencies globally shared similar qualities to fraudulent financial schemes, as this type of asset does not usually have a substantial financial back-up.
Russia’s concerns were backed by Moas, who said that it is impossible to regulate cryptocurrencies at this stage.
“As far as regulation goes, it’s very hard to regulate this, because it is virtual and decentralised. The definition of decentralised is the fact that it can’t be regulated. It’s too late to regulate, it’s already gotten so big. The genie is out of the bottle. There will be growing pains, there will be an exchange that maybe will go bankrupt or it will be hacked, or run by criminals. It’s possible.”
He recommended splitting investment across different cryptocurrencies in the top-20 in case Bitcoin succumbs to rival Bitcoin Cash, or other digital currencies take the lead.
“What I recommend is that people split their money across five different accounts, so you will have some of your money in Livecoin, in Coinbase, in Bitfinex, in Poloniex, in Bittrex. No one can guarantee that Bitcoin will be the winner here,” Moas said.
Bitcoin Cash has so far failed to gain the widespread support and dipped over 50% in value on Wednesday, after initially trading steadily at $700.
“There hasn’t been a lot of support for the new coin and if they do not offer something exclusive, usable in the short or long term, it will go the same way as many other digital currencies out there,” Schouterden said.
“Don’t get me wrong, new digital currencies are a day trader’s bread and butter but if they do not come up (with something) that screams ‘this new coin will be used for this or that service exclusively’, it will not go far, in my opinion.”
Moas and Schouterden agreed that the blockchain technology would prosper in the future and could be of use to banks and medical sector, among others.
“Many financial institutions as well as the EU are actively looking to incorporate blockchain like technologies in their day-to-day work,” Schouterden said.
Moas said that Bitcoin and other cryptocurrencies would undergo a boom in the next decade similarly to computers and the internet in the 20th century.
“I believe Bitcoin will go to $50 000 in the next 10 years. A lot of people believe it will go even higher than that, but I want to be conservative.”
“The consensus is that it is going higher; it is just the question of how high it goes and how long it takes for us to get there. This is a big deal, this is like the internet 20 years ago, and it’s like computers 30 years ago.”
Cryptocurrencies have no material form and global currency regulation does not currently apply to them. An unlimited number of anonymous sources can issue and use such currencies.
Central banks worldwide have treated the phenomenon with caution, although some have started exploring the possibilities it offers, and have even developed their own cryptocurrencies. – Sputnik